To mark ten years since Chancellor George Osborne delivered the "austerity budget," the CAGE Research Centre at the University of Warwick has published a special issue of Advantage magazine exploring the economic and societal impact of that decision.
On the morning of the anniversary, CAGE Director Mirko Draca will also host an online debate bringing together academics and commentators to discuss what trends are likely to be important in a post-austerity and post-COVID-19 UK.
The economic shock of coronavirus has brought perennial questions about government borrowing and spending, NHS funding, social care and welfare, inequality in income and education, and wellbeing, into renewed focus. In the special edition, leading economists reflect on these issues and consider what lessons can be learnt as the UK plans its recovery from the COVID-19 pandemic.
Mirko Draca said "The COVID-19 pandemic raises the prospect of Austerity Mark 2 once we start to think about paying for the crisis measures that were taken. The government made a spectacular U-turn on austerity in 2017. Are we set for another one? Is this wise given what occurred in the UK during the 2010s? Are there alternatives? This is what we want to discuss."
Contributors include:
- Gemma Tetlow (Institute for Government), who asks whether the pandemic will lead to a fundamental shift in the role of the state, and in public expectations of how it should be funded.
- Nick Crafts (University of Sussex), who reveals that the austerity of the 2010s lasted much longer and amounted to a bigger fiscal squeeze than was imposed during the austerity periods of the 1930s and 1980s.
- Mirko Draca and Monica Langella (CEP,LSE), who investigate if cuts to police numbers triggered the 2013 spike in violent crime, concluding it is harder to reduce crime with more police and better services and benefits than it is to increase crime by cutting these public resources.
- Thiemo Fetzer, who presents the findings of an analysis of housing benefit changes and shows that a price was paid in human misery which far outstripped savings to the Treasury; and, in his second article, shows how austerity tipped the balance of opinion in favour of Brexit.
- Arun Advani and Andy Summers (LSE), who debunk the myth that we are 'all in it together' – a closer look at capital gains tax reveals the share of resources going to the top one per cent increased substantially over the austerity decade.
- Claire Crawford (Birmingham), who breaks down education spending and finds resources being focused on early years and childcare, with the aim of making it easier for parents to work rather than tackling educational inequality.
"Austerity – where next," an online panel discussion chaired by CAGE Director Mirko Draca, will include presentations by some of the experts featured in the special issue, and a debate among researchers and commentators who will discuss the lasting impact of austerity and how its legacy might influence policymakers' decisions in response to the COVID-19 crisis.
